• We are ceasing coverage on Astro Malaysia, due to a reallocation of internal resources. Our last call was NEUTRAL with a DCF-derived TP of MYR0.28.

• 1HFY25 (Jan) results recap. Astro’s results were expectedly weak as adex hit a new low. 2QFY25 core earnings of MYR27m (+8% QoQ, -37.2% YoY) brought 1HFY25F core earnings to MYR52m (-50% YoY), at 41% of our and 38% of Street’s full-year forecasts. 1HFY25 revenue fell 7.9% YoY, mainly on weaker subscription revenue and adex. EBITDA fell on Olympics-related content cost and higher broadband opex sequentially, partially offset by savings from the decommissioning of the MEASAT-3A satellite in July.

• Ceasing coverage. Our most recent recommendation was NEUTRAL, with a DCF-derived TP of MYR0.28. The TP incorporated a 4% ESG premium given its ESG score of 3.2. While the MYR strength and potential bottoming out of adex should provide some respite to the share price and stock sentiment, the outlook for the group remains lacklustre due to the inflationary environment, tightened discretionary spending, and structural issues afflicting the group.

Source: RHB Research - 8 Oct 2024